Crude price recovery lifts PetroChina

A PetroChina technician inspects equipment at an oil refinery in Fushun, Liaoning province. The company's revenue for the third quarter rose 17 percent from a year ago.YANG QING/XINHUA

The mainland's largest oil and gas producer China National Petroleum Corp, or PetroChina, reported a 290 percent rise in third-quarter net profit as the company reaped the rewards of a strong rebound in crude prices and deleveraging.

With the other two mainland oil majors－CNOOC and Sinopec－also reporting higher third-quarter numbers, industry analysts expected the strong rebound to continue in the fourth quarter of the year also.

PetroChina's net profit rose 290 percent from a year ago to 4.69 billion yuan ($707 million) as the company cut debt and interest expenses.

Revenue for the period rose 17 percent from a year ago to 481.8 billion yuan, the Beijing-headquartered company said in a filing to the Hong Kong stock exchange.

With the winter heating season approaching in the northern parts of China, analysts believe PetroChina's earnings could continue rising in the fourth quarter with wholesale natural gas demand set to go up from mid-November.

Li Li, research director for the energy sector at ICIS China, a consultancy focused on the energy industry, said Chinese oil giants have benefited massively from the rebound in international oil prices during the first nine months of this year.

The profit rebound, based on last year's low base, which was also the company's worst first-half profit since its listing in 2000, will continue and the oil and gas industry will also gradually improve with better risk resistance capacity, she said.

"PetroChina's revenue and profitability are expected to continue improving in the fourth quarter, thanks to higher crude prices and generally better cost controls in the oil and gas sector," said Li.

Crude production fell to 660 million barrels in the January to September period this year, down 5 percent year-on-year.

China Petroleum & Chemical Corp, the world's biggest refiner, also known as Sinopec, also disclosed its third-quarter report late Monday, saying its profit advanced by 13 percent as earnings from refining operations offset upstream and impairment losses during the period, while its net income increased to 11.5 billion yuan.

Third-quarter revenue of CNOOC Ltd, the listed arm of China National Offshore Oil Co, also rose because of higher oil and natural gas prices, with revenue from oil and gas sales in the third quarter rising 16.9 percent to about 35.94 billion yuan, the company said.

PetroChina and Sinopec also vowed to complete important internal corporate reforms by November, as part of the plan to help clear the institutional barriers for further reform of State-owned enterprises and improve operational efficiency.

According to the State Council, all central SOEs, except financial and cultural ones, will be registered as limited liability companies or joint-equity corporations in accordance with the Company Law by the end of 2017. It is also an attempt to accelerate the establishment of an effective and balanced corporate governance structure, based on the legal person status, as well as a flexible and efficient marketized management mechanism.